That would require every gas station in town to conspire and prop up the price. If even one undercuts the rest, they'll all have to drop to match. One of them will surely undercut the original undercutter, only to be underundercut by someone else.

Eventually, everyone will price as competitively as profitably possible.

That would require every gas station in town to conspire and prop up the price. If even one undercuts the rest, they'll all have to drop to match. One of them will surely undercut the original undercutter, only to be underundercut by someone else.

Eventually, everyone will price as competitively as profitably possible.

TL/DR : free market

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I think it starts way up the line than the gas station, they don't make much, at least around here.